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Brief: Disney - Case Study Example

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In the given ambiguous circumstances for Disney, it is crucial both to diversify company’s activity through investing in theme parks and media networks and to lower the degree of vertical integration though encouraging alliances. As one of the most popular companies in…
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Case Brief: Disney
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Download file to see previous pages 16). Nevertheless, unequal development of these markets and unstable history of Disney development make it necessary to investigate its corporate-level strategy in detail.
It is evident that core competencies of Disney from the very beginning of its existence are being horizontal family-oriented entertainment corporation. With the decision to make company public in 1940, Disney brothers also enabled focusing on international markets in company’s current activity. Previously, being international animated corporation was also among Disney’s core competencies. Currently, competition in this segment does not allow thinking so. As global company, Disney constantly orients on the economies of scale. In particular, it has fixed costs on the product (film) and gains profits depending on the number of its buyers (box office). While developing, Disney Company also paid attention to the economies of scope. For instance, it launches monthly meetings of executives and certain coordinated corporate events. In addition, in-house media buying group aims to coordinate media buying for the entire company (case, p. 6). All this together helps the company to reduce the costs of marketing campaign spent on each syndication group. Supplementing these features, the key element to comprehend boundaries of the firm is to reveal its style of managing transactions in different markets. Throughout the corporate history, Disney realized the benefits from reducing transactional costs. In particular, examples of founding Buena Vista Distribution, establishing Disney Press, and merger with ABC serve as illustrations of company’s intention to cover all the production costs by company itself not by relying on market. In short, it is reasonable to state that Disney involves vertical integration at the highest level in its production as diversified global corporation.
The key benefit of vertical integration demonstrated by Disney is its ability reduce costs ...Download file to see next pagesRead More
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